Mini-review: The Forgotten Man

There was a hole in my understanding of the Great Depression, and I suspect I’m not alone. We knew the stock market crashed in ’29; Herbert Hoover was run out of Washington on a rail, replaced by Franklin Delano Roosevelt, in ’32; FDR launched a staggering array of public works and programs; and World War II truly (finally!) pulled the U.S. out of the Depression.

Sound about right?

The question, then, is: what the hell happened between 1932 and December 7, 1941? That’s a full decade – why did the economy remain torpid at best for so long?

Into the breach comes Shlaes with an intriguing, well-supported argument that FDR’s vision and policies actually prolonged the Depression. Punitive taxes on the wealthy caused industry to go into a shell (it’s one thing to risk a million dollars in order to make a million dollars. It’s quite another to know that should you succeed, the government will promptly confiscate 85% of the payoff). The federal government artificially kept wages high even when there was no demand to support those wages, causing massive layoffs and slowing growth in myriad industries.

And on and on. The Forgotten Man is essential for those seeking to understand the role of the federal government in business today.

So why isn’t it great? Two major reasons:

Shlaes’s writing is perfectly competent, but it’s never better than competent.

By its very nature this is a wonkish book, diving deep into policy, political infighting, and legal cases. For such a story to really shine, we need an uber-narrative – an arc tying all the details together, complete with frequent pointers explaining how the details mesh with the big picture. For the most part, Shlaes fails to provide this umbrella.

Despite the caveats, I’d recommend the book to any open-minded reader who’s willing to entertain the idea that FDR didn’t single-handedly lift the nation from the Depression.